IBM’s ‘mixed blessing’ of focus on cash flow ‘overshadowed’ revenue gain
International Business Machines Corp. shares slumped Thursday after analysts picked apart Big Blue’s free cash flow results and outlook amid layoffs, and found a “mixed blessing” in the company’s drive to shift focus away from earnings.
IBM IBM shares fell as much as 5.5% to an intraday low of $132.98, while the Dow Jones Industrial Index DJIA — which counts IBM as a component — was up 0.2%, the S&P 500 index SPX rose 0.5%, and the tech-heavy Nasdaq Composite Index COMP gained 1%. “The mixed blessing of the FCF-centric objective is that there’s nowhere to hide —it’s transparent, and it is what it is, for better or for worse,” Ellis said.
IBM shares, even with Thursday’s drop, are up 0.5% over the past 12 months, compared with a 7% drop on the S&P 500.
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